Technical debt is an incomplete or inadequate aspect of a software project that risks increased maintenance costs if not addressed. It includes imperfect designs, code that does not meet quality standards, lack of documentation, and missing or incomplete tests. While technical debt can increase productivity in the short term, it risks higher maintenance costs over time as interest accumulates. It is important to prioritize repaying high interest debt first while continuing to deliver customer value. Managing technical debt requires tracking it in a backlog and addressing it incrementally.